How to Find An Automotive Repair Software That Supports Your Multi-Shop Growth

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January 17, 2023

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Read time: 3 min

Let’s start off by laying down the foundational launching points for starting your original shop: you found your niche, you got the right advice, you started with the right branding, and you impressed your customers by providing exceptional customer service. But there are four key factors that become extremely important as you go from being a single shop owner to a multi-shop owner. 

You’ll want to:

  1. Stay organized as you scale
  2. Create consistency across your locations
  3. Test the performance of each of your locations 
  4. Leverage an automotive repair software that will support your team as you grow across multiple locations 

To select the management tools that will catapult your multi-shop owner journey, you’ll first need to weigh the pros and cons of each of your shop’s processes and procedures.

From there, you can find a system that will uphold and scale the processes that made your shop so successful in the first place, but now across multiple locations. Later in this article, we’ll specifically dive into automotive repair software like Tekmetric and discuss how it supports you, your team, and your customers as you go from a single shop owner to a multi-shop mastermind.  

Here’s how to choose an automotive repair software that makes it possible to grow and easily manage multiple shops. 

First Things First: Get Your Shop’s Operations Down 

Opening up multiple auto repair shops isn’t effortless. It takes hard work and diligent planning. You’re likely to encounter challenges along the way, especially if your shop doesn’t have its operations and systems down pat before expanding. 

According to Automotive Research, the biggest challenges for automotive repairs shops and their technicians include finding time for hands on training (42.6%), staying up to date with advances in diagnostics (31.6%), keeping up with advances in vehicle technology (31.1%), and finding good, knowledgeable and motivated technicians (29.2%).

Before you consider expanding to multiple locations, your existing shop should be stable, profitable, and running smoothly. If you still have problems with your current shop, they will be magnified into even larger growing pains when you expand. Your best bet is to resolve as many problems and get everything in order before making the leap from a single auto repair shop owner to a multi-shop owner (MSO). With the right automotive repair software, you can carefully stabilize your shop’s operations and monitor where you’re at in terms of profitability, customer retention, and facing current and future challenges. 

Once your shop’s operations are organized and tested, it’s time to hone in on change management. Change management is a collective term for any and all approaches when it comes to preparing, supporting, and helping your business grow. There are many different approaches to change management, but for auto repair shops expanding to multiple locations, there are often three major phases: The Planning Phase, The Implementation Phase, and The Impact Phase.  

The Planning Phase: Map Out Decisions That Align With Your Goals 

The planning phase happens during or after you’ve realized that your shop could have better systems and processes in place to expand beyond one location. According to MindTools, the planning phase usually consists of the following four elements: 

  1. Sponsorship: How will you secure, engage, and use high-level support to sponsor the change?
  2. Involvement: Who is best positioned to help you design and implement the change? For example, will you need external expertise? Or can you use internal resources?
  3. Buy-in: Change is most effective when you are able to win support from people across the business. How do you plan on winning the support of your team?
  4. Impact: Finally, think about what success should look like. How will you predict and assess the impact of the change that you need to make? What goals do you need to achieve?

You might find that you need to make some changes before expanding to multiple locations, and expanding to another location is a big change in itself. So naturally, as your shop expands, you’ll be faced with big decisions: What system will you use at the new location? Who will manage the new location? How will you support the growth of both locations simultaneously? The choices you make should all support and achieve your future goals, but you need to know what those goals are.  

Twelve Questions To Ask Yourself During The Planning Phase

Before you opt for opening that second, third, or tenth shop, make sure you ask yourself these questions: 

  1. Is our current shop’s demand higher than we can handle?
  2. Has our shop’s ARO hit a plateau?
  3. Can we afford to hire and pay an entirely new team?
  4. Is our current shop overwhelmed during peak business hours? 
  5. Do we have automotive repair software that can support more than one location?
  6. Have we reached our desired profitability rates? 
  7. Have we reached our shop’s capacity limitations? 
  8. Have we run out of space to serve all of our customers?
  9. Are our shop’s profits stable? 
  10. Is there a big enough market in the area for another location? 
  11. Can I handle operations for more than one shop? 
  12. Is my current team trained so that we can focus on training an entirely new team?

If you are able to positively answer each of those questions, it might be time to open up the next location. 

Want to hear from auto repair industry leaders that have been faced with growing pains but have come out stronger than before? Check out our customer's success stories!

The Implementation Phase: Put Your Change Into Practice  

During the implementation phase, you’ll want to carry through with the plan you created during the planning phase. Setting goals and expanding with intention can help any business succeed and meet their overall strategic vision. 

Once you’ve figured out the four elements of the planning phase (sponsorship, involvement, buy-in, and impact), your game plan is mapped out, and you’re ready to hit the ground running. The implementation phase is all about building momentum and keeping it going so that you get your supporters—business partners, team members, and even customers—behind the changes you're making. 

Now, keep in mind that you need to keep implementing with intention throughout the entire change management process. If you aren’t mindful of how the decisions you make will impact your progress, your hard work could encounter more setbacks than successes along the way. 

Tekmetric Co-CEO Sunil Patel explains it perfectly:

“Let’s say you set a goal for yourself to go to the gym more often. Now, if you don’t want to go to the gym, then you will keep training your mind to make sure that gym is just not your thing. It’s not until you have a breakthrough that you are able to change your mindset. You have to train your Reticular Activating System (RAS), a network of nerve pathways located in the brain stem that mediates overall behavior, so that going to the gym becomes a positive activity.

Along with reminding yourself that you want to go to the gym, write down when you want to make the change and why. Let’s say this is your goal, ‘In March 2023, I will feel great, I will look great, my clothes will fit me better, and I can hear my family and friends saying ‘You’ve done a fantastic job.’ You have to recognize and reframe each limiting belief that is preventing you from achieving your end goal. An example of a limiting belief would be something along the lines of, ‘Ah, I’ve had a long day. I can just go to the gym tomorrow.’ You have to reframe it to, ‘I’ve had a long day. Time to finish strong with a trip to the gym.’ You have to be very intentional. You truly have to want to reach the finish line.


This concept goes for shop owners, too. If you’re wanting to expand your shop, you’ll need to change the way you’re running your business.” 

The Impact Phase: Expand Into New Territories 

Once you’ve mapped out your course of actions and you’ve intentionally implemented the changes, then you’re ready to see how all of your hard work has impacted your business. This final phase is where you measure they pay off and anchor the changes. If your business has reached the desired impact, that’s great! If it doesn’t seem to be reaching the desired goals you had initially mapped out, you have the opportunity to go back through phase one and phase two to implement corrective measures. 

According to Robin Sharma, a top leadership expert, “Any change is difficult at the beginning, complicated in the middle, and beautiful at the end." Even if you have to go back and work through some of the difficulties and complexities again, just know that the results will make it all worth it. 

Consistency is Key

Whatever your business has going for it at the original location, you’ll want to replicate that success at the additional shops you open up. Your customers want to have a consistent experience whether they show up to your original location or to your new shops. And one way you can give your customers a consistent experience is by selecting an automotive repair software that is the right fit for your business operations. 

Find An Automotive Repair Software That Helps You Replicate Processes

You’ve worked hard to get your shop to where it is now. And if expansion is on the horizon, then you’ve done something right. Of course, you could opt to not expand your business and keep it where it’s at. There’s no wrong answer; especially since what works for your shop might not work for another shop owner. But if you’ve chosen to open up additional shops, then you’ll want each of your customers to have the same positive experience in whichever one of your shops they go to. 

Before we dive into what to look for in a dependable cloud-based automotive repair software, let’s look at the pros and cons of cloud-based systems and on-premise, legacy systems. 

How a Dependable Cloud-Based Automotive Repair Software Helps You Replicate Processes

A dependable automotive repair software should make your customer’s lives easier. Here are some features to look for: 

  • The ability to track your customers’ vehicle history. The right cloud-based automotive repair software will track all previous work that your technicians have done. Find a system that tracks the work your shop has completed for each customer, as well as the work they’ve declined, so that you can see what kind of jobs your customers commonly do or do not approve of. 
  • Built-in Digital Vehicle Inspections (DVIs) that clearly and cleanly show your customers exactly what is going on with their vehicle. If customers are waiting in the lobby, your service advisors should be able to pull up the DVI on a tablet or computer to show them any findings. Or if your customers are away from the shop, your service advisors should be able to text or email the customer a copy of the DVI report so that each customer can easily see what’s going on from wherever they are. 

Your automotive repair software should also make life easier for your team. Look for these feature to ensure that everyone at your shop is getting the support they need from their system: 

  • Features that let your service advisors track customer details with just a few clicks. The right cloud-based automotive repair software will make it easy for you and your team to search customers by name, phone number, or their car’s plate number. 
  • Features that give your team the ability to have a consistently smooth workflow across all shops. When you’re looking for an automotive repair software that will help your team’s workflow, you’ll want to find a software that has a solid, intuitive process for repair work

And of course, you can’t forget about yourself. When looking at automotive repair software, look for features that will make your life easier: 

  • Focus on your shops without having to be in your shops. When you’re an MSO, you can’t be in every shop at once. You need to be able to check on all of your shops from any location. Most cloud-based systems should have you covered, but also see how intuitive and easy it is for you to see what’s going on at your shop from all of your devices. 
  • Real-time reports. As you expand, you’ll want to test out new ideas to see what works and what doesn’t. Leveraging a cloud-based automotive repair software that can track each of your shop’s metrics will let you test ideas at one location and measure its impact so that you can better decide if it’s worth implementing across all locations.

Tek-Tip: Now that you’re an MSO—or a soon-to-be MSO—you’ll want to use marketing strategies that will help your shops gain and retain more customers.

Level Up With a System that Enables Multiple Shop Growth 

Seven Things to Look For in an Automotive Repair Software Company 

The automotive repair industry isn’t going anywhere. In fact, research shows that the market size of the automotive repair industry in the U.S. has grown 0.3% per year on average between 2017 and 2022, and is expected to continue growing well beyond 2022. So, if your first shop has shown success in your community, and you’ve answered the twelve questions in the planning phase above with a resounding “yes,” leveling up by opening up additional locations will help you continue to reap the benefits. 

Just as you select the right teammates to help your vision come to fruition, you also want to carefully select an automotive repair software company that will drive profits, eliminate the need for back-and-forth communication, and enhance productivity. 

Here are seven indicators that the company behind the automotive repair software will be there for you throughout your MSO journey:  

1. Data Migration and Onboarding 

What’s one tedious task any shop owner faces when they’re transitioning to a new software, location, or program? Data migration. The right automotive repair software company won’t put that all on your shoulders. 

“If I had an issue, somebody from the company would reach out to us immediately for assistance.” 

- Bryan Jewett, Casey’s Automotive 

In fact, the right software partner can make data migration a seamless transition. And better yet, they should also help with onboarding.

Tekmetric’s Data Migration and Onboarding Process

Tekmetric’s customer success team works with multi-shop owners to craft methodical roll-out plans that minimize disruption as your switching systems. We want your team to feel excited and confident about using Tekmetric to reach their full potential. We work hand-in-hand with your team to get them up to speed so that they flourish in their roles. 

Tekmetric’s data migration and onboarding process has been tried, tested, and refined through extensive experience with multi-shop owners and enterprise clients.

2. Standardization

When you make the leap from owning a single shop to being a multi-shop owner, standardizing each of your shop’s processes with automotive repair software will make your life a lot easier to say the least. But you need to make sure you find the right solution. 

The right automotive repair software will: 

  • Eliminate the need for back-and-forth communication with a True Two-Way texting feature. 
  • Keep everyone on the same page—both your customers and your team—with a Job Board that streamlines the repair order process. 
  • Help you build trust with customers and sell more work by leveraging DVIs.
  • Provide your customers with multiple payment options, including Text-To-Pay. 
  • Let customers authorize repairs wherever they are with digital authorization. 
  • Help you and your team provide a dependable, reliable, and consistent experience each time they set foot in your shops. 

Standardize Your Shop’s Stock & Inventory Process With Tekmetric 

Not only will Tekmetric’s Automotive Repair Software improve communication, teamwork, payment, authorization, and consistency, but it will also help keep your shop’s inventory well organized. 

Tekmetric’s Inventory Table will show the value and cost of your inventory parts. You can see the Total Value of Parts and the Total Value of All Inventory, as well as the Total Value of Tires and the Total Value of Batteries at each individual location. 

With Tekmetric, you can: 

  • Track parts with precision
  • Auto apply matrices
  • Check off the parts you need from the Inventory Table, and they will get added to your Parts Hub in Tekmetric 
  • Have the right amount of inventory at all times to avoid having too much or too few parts on hand

3. Workflow

Let’s say your first location has four technicians and two service advisors, and your new location has three techs and one service advisor. Managing ten employees on top of running two shops can be tedious if you lack a solid workflow

With the right cloud-based automotive repair software, you can create a smooth and consistent customer intake process. When greeting customers, service advisors have to get a lot of information. Having the ability to add any customers’ notes within seconds—whether it’s adding a new customer in the database or updating an existing customer’s profile—is a game changer. 

And that’s just on the customer side of it. A good cloud-based automotive repair software will also help your technicians and service advisors collaborate in real time. By creating accurate and easy-to-understand inspection reports and estimates, your entire team will be in-the-know and better able to serve your customers since everyone will be on the same page.   

No matter how many team members you oversee, you should have the ability to check in on your own accord, from wherever you are. Another added benefit to using a high performance cloud-based automotive repair software is that you can easily monitor your team’s workflow. With just a few clicks, you have the ability to see what’s going on at each shop, whether it’s to check on RO progress or to see where your team is at productivity-wise. 

Simplify Your Multi-Shop Workflow

Tekmetric’s Job Board: 

With Tekmetric’s Job Board, you can create and save custom inspections that clearly guide technicians through the inspection process. Once an inspection is saved in Tekmetric, your service advisors can easily assign inspections to technicians. As technicians and service advisors move through the workflow of a repair order, service advisors can assist customers with the estimates by initiating and presenting the information, receiving authorizations, and accepting the payment. 

RO Notes and Summaries: 

In Tekmetric, your service advisors can quickly add RO notes, updating anyone who has access to the Job Board. Having the ability to add RO notes to each repair order will provide your team deeper insights into the repair and the customer’s history with your shop. Tekmetric makes it easy for your service advisors to see each customers’ Lifetime Close Ratio, Lifetime ARO, and Lifetime Profit to better navigate the estimate and sell more work.  

Tech Board: 

With Tekmetric’s Tech Board, your service advisors can see exactly which jobs need to be dispatched and how much work each tech has on their plate—from one screen. If one RO has multiple jobs, service advisors can easily split up the work across multiple techs. Also, service advisors can easily prioritize the jobs that need attention faster than others by moving the urgent jobs up on the work columns.  

4. Integrations

As you grow, your business may need additional support from other programs. Choosing an auto repair software that can easily integrate with other programs and systems will make your life easier. 

Tekmetric Integrates With Industry-Leading Solutions

With Tekmetric, you can select the right mix of tools that make for an effective business solution. Whether it’s product integrations, two-way texting, or a marketing tool, all of your locations can become a go-to repair shop for customers.  

5. Metrics

In your search for the best cloud-based automotive repair software, pop the hood and look into the metrics that it logs and stores for you. As your shop expands over the years, you’ll want to consistently and accurately track all of your numbers. Having the ability to track how much your shop has grown helps you hone in on the best direction for your business as well as course correct to minimize any potential kind of loss. 

When you are an MSO, you have the capability to test out different processes at different shops so that you can compare and contrast what works and what doesn’t. For example, you might notice that a large portion of your declined jobs are brake pad replacements. So what you can do is create a promotional campaign around brake pad replacements at one of your locations to see if the campaign effectively improved said location’s Close Ratio. If it works, you can scale it across all locations. If it doesn’t work, you have the data you need to adjust. 

And having the ability to share those numbers with your team will prove firsthand you’re all working together towards new heights.

The Metrics You Gain With Tekmetric

Tekmetric’s Real-Time Reports fall into four categories:

Finances: End of Day, Sales Details, and Sales Tax 
Employee Activity: Technician Efficiency and Service Writer Sales
Customer Activity: Job History, Declined Jobs, and Lead Sources
Parts Activity: Parts Ordered and Parts Usage (for parts reconciliation purposes)

Data Provided on Tekmetric’s End of Day Reports
The data you’ll find in the End of Day Report ties back to your shop’s sales and profits during a time range of your choosing:

  • Total ROs: the number of repair orders posted at your shop
  • Hours Presented: the total number of hours your shop showed customers
  • Hours Sold: the total number of hours your shop sold to customers
  • Close Ratio: the ratio of the total dollars your shop sold compared to the total dollars your shop presented to customers
  • Effective Labor Rate: the ratio of the labor dollars your shop sold compared to the labor hours your shop sold
  • Average RO (Sales): the total dollars sold on all posted ROs divided by the total posted ROs
  • Average RO (Profit): total profit dollars on all posted repair orders divided by the total posted ROs
  • Average RO (Profit Margin): RO profit divided by RO sales
  • Gross Sales: total sales dollars on all posted ROs divided by total hours sold on all posted ROs
  • Gross Profit: total profit dollars on all posted ROs divided by total hours sold on all posted ROs

See how you can Strategically Grow Your Business With Real-Time Reports in Repair Orders Software

“If I go to reports, I have so many metrics that I can look at that tell me what's going on.  Tekmetric breaks out all of those metrics and shows me what we're selling and what we're not selling. It gives me the breakdown I need to measure what I'm doing.” 

- Henderson Johnson, Toyo Automotive 

6. Pricing

When you’re selecting an automotive repair software for your shop, you’ll want to find a company that makes it easy for you to switch from tier to tier so that you can scale when you’re ready. For example, if you have to pay per user, you would have to pay each time you bring on a new employee, which can hinder your shop’s growth because you'd constantly be thinking about the cost. 

However, going with a software that has a pay per roof model means that you would only have to pay for each location you open up, but at each location, you can have unlimited users. 

The cheapest option doesn’t always mean the best return on your investment. So closely considering the pricing behind the automotive repair software is crucial. 

Furthermore, Tekmetric doesn’t lock you into a contract. So if you decide Tekmetric isn’t the right fit for your shop, you can get out stress-free. 

“Now I’m paying a fraction of what I was before switching to Tekmtric, and I don’t have to worry about downtime.” 

- Stephane Grabina, Excluservice Owner 

7. A Long-Term Vision

Finally, you’ll want to look for a company that has a vision for improving their system, and especially one that is dedicated to helping single shops and MSOs alike. When you start using a new automotive repair software, you’ll probably think of adjustments and/or features you feel would benefit the software. So you’ll want to find an automotive repair software company that considers—and prioritizes—customer feedback into the design process. 

Here are a few conversation starters that will help you find a system that will take your feedback to heart: 

  • Ask about their software version history 
  • Ask how often they add new features
  • Ask how they educate and train current users for any new features
  • Ask what their roadmap is for implementation
  • Ask to see their current process for accepting feedback suggestions 
How Tekmetric Provides Support You Can Rely On

Everyone at Tekmetric is dedicated to showing up, following up, and exceeding expectations for our users. Tekmetric collaborates with shop owners and their teams to learn about the goals they have for their shops so that we can explore how we can assist in making those dreams happen. We’ve adopted a “builder mindset,” because we don’t consider Tekmetric a “finished product.” Although we’re a lot better today than we’ve ever been, we’re still in build mode because we encourage all Tekmetric users to share their ideas to continue to make our automotive repair software a game-changer well into the future. 

Here’s how Tekmetric supports MSOs: 

  • We migrate your shop’s data over as seamlessly as possible
  • We train your team so that everyone feels confident using the new system
  • We regularly check in with you and your team 
  • As shop owners continue to grow their business, Tekmetric helps you make the most of new opportunities 

At Tekmetric, we are: 

  • Focused - when we are in agreement on a direction, we stay the course.
  • Reliable - once an expectation is communicated, we show up, follow through, and exceed expectations. 
  • Authentic - we are open and honest. 
  • Compassionate - we care about how our actions impact others. 

Tekmetric’s Automotive Repair Software Grows With You 

At Tekmetric, we’re dedicated to making it easy for you to manage multiple shops. Our automotive repair software will not only support your original location with your original hires, but we’ll also have your back as you open new locations, onboard new team members, and grow your customer base. 

There’s a reason why 3,000+ auto repair shops have selected Tekmetric as their automotive repair software.

We want the shop owners who place their trust in us to feel inspired to grow. If you want to open up a new location, Tekmetric will help you stay on top of your shop’s operations so that you can be there for all of your shops no matter where you are.

If you want to add on new team members, our price won’t increase because we have a per-roof model and will always stand by that. If you want to switch up your programs and add additional integrations to find the best fit for your shop, Tekmetric makes that a smooth and seamless process through industry-leading partnerships. 

And lastly, if you want to monitor your multi-shop metrics, we’ll help you get to know your numbers within minutes. 

Running one auto repair shop is a lot of work, and as you scale to multiple locations, the work scales, too. To continue to scale and reach more customers, you’ll want to find the right mix of people, processes, and tools that will make things more manageable as you scale, no matter what stage your business is at. 

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

FAQ

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Find out what shops in your state are charging, and how to set a labor rate that keeps your shop profitable

In the automotive repair industry, your labor rate is more than just a number on an invoice — it is one of the key metrics that drives your business's profitability and overall growth. For shop owners, staying competitive while maintaining healthy margins requires a clear understanding of how labor costs fluctuate across the country. But knowing the national average is only half the picture. The more important question is: how does your shop compare?

Whether you are running a small independent shop or a high-volume operation, knowing where you stand relative to the average labor rate in your state — and against top-performing shops in your market — is essential.

This guide covers the current landscape of automotive repair labor rates across all 50 states, the factors that drive those numbers, and a step-by-step roadmap for setting a rate that supports your shop's long-term success.

Methodology and Key Terms

Tekmetric built this auto repair shop index as a community resource, backed by data from more than 10,000 shops across North America. Shops can use this tool to benchmark themselves and see how they compare state by state.

Key Terms to Know

Labor rate: The retail price per hour charged to the customer for repair services.

Flat-rate: A pricing model where a job is billed based on a predetermined number of hours from a labor guide, regardless of how long the actual repair takes.

Effective labor rate (ELR): The actual amount of labor revenue earned per billed hour after accounting for discounts, menu pricing, and unbilled time.

Understanding these terms will help you interpret the data below and apply it to your specific situation.

Mechanic Labor Rates by State

The average labor rate across the United States is $132 per hour, with the lowest state at $85 per hour and the highest at $197 per hour. Labor rates vary significantly by state, primarily driven by local cost of living and competition.

📊 See How Your Shop Compares — Free

The data below tells you what shops in your state are charging. But the labor rate is only one piece of the picture. The Tekmetric Shop Index lets you benchmark your shop across the four metrics that actually drive profitability — ARO, car count, parts margin, and effective labor rate — against thousands of real shops nationwide.

It's free, takes less than two minutes, and requires no Tekmetric account.

➡ Benchmark Your Shop Now →

Labor Rates by State

  • Alabama: $123 per hour
  • Alaska: $151 per hour
  • Arizona: $147 per hour
  • Arkansas: $144 per hour
  • California: $163 per hour
  • Colorado: $150 per hour
  • Connecticut: $174 per hour
  • Delaware: $142 per hour
  • Florida: $154 per hour
  • Georgia: $135 per hour
  • Hawaii: $139 per hour
  • Idaho: $133 per hour
  • Illinois: $132 per hour
  • Indiana: $121 per hour
  • Iowa: $123 per hour
  • Kansas: $117 per hour
  • Kentucky: $121 per hour
  • Louisiana: $136 per hour
  • Maine: $113 per hour
  • Maryland: $138 per hour
  • Massachusetts: $130 per hour
  • Michigan: $125 per hour
  • Minnesota: $133 per hour
  • Mississippi: $113 per hour
  • Missouri: $117 per hour
  • Montana: $136 per hour
  • Nebraska: $125 per hour
  • Nevada: $144 per hour
  • New Hampshire: $125 per hour
  • New Jersey: $141 per hour
  • New Mexico: $140 per hour
  • New York: $121 per hour
  • North Carolina: $118 per hour
  • North Dakota: $129 per hour
  • Ohio: $125 per hour
  • Oklahoma: $129 per hour
  • Oregon: $147 per hour
  • Pennsylvania: $114 per hour
  • Rhode Island: $133 per hour
  • South Carolina: $126 per hour
  • South Dakota: $118 per hour
  • Tennessee: $125 per hour
  • Texas: $197 per hour — most expensive state
  • Utah: $137 per hour
  • Vermont: $102 per hour
  • Virginia: $133 per hour
  • Washington: $148 per hour
  • West Virginia: $85 per hour — lowest in the nation
  • Wisconsin: $121 per hour
  • Wyoming: $134 per hour

Factors That Impact Automotive Labor Rates

Why do auto repair labor rates vary so widely from state to state? A few key factors drive the differences.

Cost of Living

In states with a higher cost of living, shop owners face higher wages to attract technicians, more expensive rent, and elevated utility and supply costs. Those overhead realities push labor rates up — not because shops are padding their margins, but because the math demands it.

Shop Type and Specialization

Dealerships typically carry the highest labor rates because of their overhead, factory-trained technicians, and reliance on OEM parts. Independent shops often have more pricing flexibility, particularly for routine services like oil changes. Specialty shops — focused on European vehicles, diesel, or performance — tend to command higher rates as well.

➡ Benchmark Your Shop Now →

Technician Expertise and Certifications

A diagnostic job requires a different skill set than a brake job. Shops that employ ASE-certified technicians or master technicians can and should charge accordingly. The rate reflects the expertise required to do the work correctly.

How to Set Your Labor Rate (Step by Step)

Setting your rate shouldn't be based on what the shop down the street is charging. It should be a data-driven decision grounded in your actual costs and performance targets.

Step 1: Calculate Your "Loaded" Labor Cost

Start with what it actually costs you to have a technician on the floor. This includes:

  • Wages and overtime
  • Payroll taxes
  • Benefits (health insurance, 401k)
  • Workers' comp and liability insurance
  • Training and certifications

Divide that total annual cost by the number of billable hours that technician produces in a year. That's your loaded cost — and it doesn't include any profit margin yet.

Step 2: Account for Overhead

Your labor revenue also needs to cover the cost of running the business:

  • Rent
  • Utilities and shop supplies
  • Marketing and software
  • Taxes

Step 3: Determine Your Target Profit Margin

Tekmetric shops average 65% labor profit margins. If your loaded cost for a technician is $45 per hour and you want a 65% margin, your base labor rate should be at least $128 per hour.

Step 4: Benchmark Against Your Market

Your internal numbers come first, but you can't ignore the local market. If your rate is $128 and every comparable independent in your area is at $100, you need to either clearly justify your value — through better inspections, faster turnaround, stronger communication — or find ways to reduce overhead. Benchmark against shops of similar size, service mix, and geography.

Step 5: Implement a Labor Matrix

Not every repair order is equal. Shops that implement a labor matrix can automatically adjust rates based on job complexity — billing more appropriately for diagnostic work or specialty repairs without manually recalculating every estimate.

➡ Benchmark Your Shop Now →

How Tekmetric Helps Your Shop Stay Profitable

Managing labor rates manually is a recipe for inconsistency and missed revenue. Here's how Tekmetric gives you the tools and data to stay ahead.

Know Where You Stand with the Tekmetric Shop Index

Before you can optimize your labor rate, you need to know how your performance compares to other shops. The Tekmetric Shop Index gives you free, instant benchmarking across four metrics: ARO, car count, parts margin, and effective labor rate. Enter your shop's numbers and see exactly where you rank against thousands of shops nationwide — no account required, no sales call, no commitment.

You can't improve what you don't measure. This is where that work starts.

➡ Benchmark Your Shop Now →

Real-Time Profitability Tracking

Tekmetric's reporting features give you live visibility into ARO, car count, revenue, and technician productivity — so you always know how your shop is performing, not just at the end of the month.

Custom Labor and Parts Matrices

Tekmetric lets you build a labor matrix that automatically adjusts rates by job type. A custom parts matrix works the same way on the parts side, protecting your margins consistently across every repair order.

Digital Inspections That Justify Your Rate

Tekmetric's digital vehicle inspections let your team send photos and videos of needed repairs directly to a customer's phone. When a customer can see the worn brake pad or the leaking gasket for themselves, they're far more likely to approve the work — and far more comfortable with the rate attached to it.

Accurate Labor Guide Integration

Tekmetric integrates with industry-standard labor guides so your estimates are based on real, accurate times — not guesswork or memory. That means technicians get credited fairly under a flat-rate system, and your service advisers spend less time on paperwork and more time with customers.

Benchmark Your Insights Now

Knowing the average labor rate in your state gives you a useful reference point. But the shops that stay profitable long-term don't stop at state averages — they benchmark continuously, track the right metrics, and make adjustments based on data instead of instinct.

Your labor rate should reflect your actual overhead, your team's capabilities, and the quality of service your customers experience. Use the state data above as a starting point, then go deeper with the Tekmetric Shop Index to see how your shop compares across every metric that drives profitability.

Ready to see where you stand? Benchmark your shop free with the Tekmetric Shop Index →

Average Auto Repair Labor Rates by U.S. State

June 30, 2026

Read time: 3 min

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Compare your shop's performance against real data from thousands of auto repair shops by state.

Benchmarking data is only useful when it changes what you do next.

If you've run your shop's numbers through the Tekmetric Shop Index and seen where you rank on ARO, car count, parts margin, and effective labor rate — good. You have a diagnosis. Now you need a plan.

This post walks through what each gap in your TSI results is actually signaling, which operational levers move the needle on each one, and how to build a focused 90-day improvement target that gives your team something concrete to work toward.

Start With the Biggest Gap

Your TSI results will show you four rankings. Resist the temptation to try to improve all four at once. The shops that make the most progress pick the metric with the largest gap and stay focused on it for a full quarter before adding another priority.

Trying to improve ARO, car count, parts margin, and effective labor rate simultaneously often means improving none of them because the operational changes required for each are different and can compete for your team's attention.

So step one is simple: look at your four rankings, find the biggest gap from the industry benchmark, and start there.

Gap: ARO Below Benchmark

If your average repair order is lagging, the most common root cause is inspection performance. Either digital vehicle inspections (DVIs) aren't being completed consistently, or they're being completed but not converted into approved work.

A few questions to answer before you act:

  • What percentage of repair orders have a completed DVI attached?
  • Of the DVIs sent to customers, what percentage include photos or video?
  • What's your close ratio on recommended work?

If DVI completion is below 90%, that's almost always the first lever. Tekmetric's Inspection Report shows completion rates by technician, making it straightforward to identify who needs coaching and who's already performing well.

"Now I can look at everybody at a glance. I can be in a different state, different city and know exactly what's going on in each location all the time."  — Leroy Ingram, Ooroo Auto Care, Tekmetric Customer

If DVI completion is strong but close ratio is low, the issue is likely in how inspections are being communicated to customers — photo and video quality, the language in findings, how quickly the estimate follows the inspection.

Shops on Tekmetric also have access to the Parts and Labor Matrix, which protects against underpricing. It can be a quiet ARO killer that doesn't show up until you look at margin data.

➡ See how your ARO compares →

Gap: Car Count Below Benchmark

A car count gap can mean two different things depending on how it breaks down: you're not bringing in enough new customers, or your existing customers aren't returning at the rate they should. Both problems need attention, but they need different solutions.

For new customers, the questions are acquisition-focused. Tekmetric's online booking gives customers a way to find you and schedule an appointment 24/7 — filling bays without your team picking up the phone. The more friction you remove from the booking process, the more new customers follow through.

For returning customers, the questions shift to communication. Are declined jobs being followed up? Are customers receiving service reminders? Tekmetric Marketing automates follow-ups on declined work and scheduled maintenance intervals — so your team stays in contact with your car count without adding manual effort.

"Seven hundred and two dollars in ad spend has generated 11 net-new customers and $12,802 in new customer revenue — an 18.3x return on ad spend before factoring in the lifetime value of those customers returning for future visits."  — Tanner Markham, Phase 2 Automotive, Tekmetric Customer

➡ See how your car count compares →

Gap: Parts Margin Below Benchmark


A parts margin gap is almost always a pricing problem — either your markup isn't keeping up with cost increases, you're applying flat markup where a tiered matrix would protect margin better, or your team is manually overriding prices inconsistently.

The fix starts with reviewing your Parts Matrix in Tekmetric. A well-structured matrix automatically applies the right markup based on part cost ranges, removing the inconsistency that comes from individual pricing decisions at the job level.

After updating the matrix, run your Parts Purchased Report to verify that retail pricing is reflecting the changes accurately. This is also a good time to cross-reference against recent vendor invoices — if costs have moved significantly in the last 6 months, your matrix thresholds may need updating.

➡ See how your parts margin compares →

Gap: Effective Labor Rate Below Benchmark


If your effective labor rate is trailing your posted rate, the most common culprits are inconsistent discounting, flat-rate job structures that cap labor recovery, or package pricing that doesn't account for actual labor time.

Start by pulling your Discount Detail Report to see where and how often discounts are being applied. If they're being applied inconsistently across your team, that's a coaching conversation — and Tekmetric's real-time reporting makes it easy to see which service writers are discounting most frequently.

The Labor Matrix is the structural fix. Similar to the parts matrix, a tiered labor matrix adjusts the billed hours or dollar amount based on configured ranges, protecting margin without changing what customers see on the invoice.

➡ See how your effective labor rate compares →

Building a 90-Day Improvement Target

Once you've identified your primary gap and the lever that addresses it, the last step is turning it into a measurable target for the next 90 days.

A good 90-day target is specific, tied to a leading indicator, and gives your team something to track week over week. For example:

  • ARO gap: "Increase DVI completion rate from 72% to 90% over 90 days, tracked weekly via Inspection Report"
  • Car count gap: "Launch declined-job follow-up automation within 30 days; track returning car count monthly for 90 days"
  • Parts margin gap: "Update Parts Matrix for all parts under $150 within two weeks; track parts margin weekly via Parts Purchased Report"
  • Labor rate gap: "Reduce average discount percentage by 15% over 90 days, tracked via Discount Detail Report"

These aren't arbitrary numbers — they're examples of the leading-indicator approach that lets you see progress before the outcome metric moves. Set yours based on where you're actually starting, not where you want to end.

Check Your Rankings Quarterly

Your TSI results are a snapshot. Set a reminder to re-run the benchmarking every quarter so you can see whether your numbers are moving relative to the industry — not just relative to your own history.

The shops that use benchmarking most effectively are the ones that treat it as a recurring discipline, not a one-time exercise.

"Thanks to Tekmetric, we've really enhanced our business and are looking to expand. We're the #1 shop, 6 years in a row in Upstate New York."  — Chris Chevalier, AAA Auto Repair, Tekmetric Customer

➡ Benchmark your shop now →

Takeaways

  • Start with your biggest gap — don't try to move all four metrics at once.
  • ARO gaps usually trace back to DVI completion rates or close ratios.
  • Car count gaps split into acquisition and retention problems — each needs a different fix.
  • Parts margin gaps are almost always a pricing matrix issue.
  • Effective labor rate gaps often come down to discounting habits and job structure.
  • A 90-day leading-indicator target turns benchmarking data into team direction.

➡ Benchmark your shop now →

See how your shop stacks up against thousands of auto repair shops nationwide

You track your ARO. Maybe you watch your car count week over week. You know when a month is good and when it's below par.

But here's a question most shop owners can't answer quickly: Compared to shops like yours, are your numbers strong, average, or quietly underperforming?

There's a real difference between a number that's improving and a number that's competitive. A shop can grow ARO year over year and still be well below what high-performing shops are seeing in their market. Without an external reference point, you don't know which situation you're in.

That's the problem benchmarking solves, and it's the reason the data matters more than the direction.

Internal Tracking Tells You the Trend. Benchmarking Tells You the Truth.

Internal performance tracking is essential. If you don't know your ARO, car count, parts margin, and effective labor rate, you're managing without the most basic tools. But internal tracking has a structural limitation: it can only tell you how you're doing relative to your own history.

That's useful for spotting momentum — a rising ARO, a growing car count, tighter parts margin. What it can't tell you is whether your baseline is strong or weak relative to the market.

A shop with a $580 ARO that has grown from $520 over two years has made real progress. But if top-performing shops in their region are averaging significantly higher, that progress hasn't closed the competitive gap. It's just moved in the right direction.

The fix isn't to stop internal tracking. It's to add an external benchmark so you know what the target actually looks like.

➡ See how your ARO compares →

The Problem With Benchmarking From Anecdotes

Many shop owners get their benchmarks the informal way: conversations with peers at trade shows, numbers shared in coaching groups, or revenue figures posted in forums. These have real value, but they're also limited.

Self-reported numbers skew high (people share their wins). Peer groups are small samples. Industry averages from trade associations are often lagged and lack the granularity you need to compare fairly — a six-bay shop in a suburban market shouldn't be benchmarking against national averages that include dealership-adjacent shops in metro areas.

The more useful comparison is data drawn from shops operating in similar conditions, at similar scale, tracked in a consistent and anonymized way.

What Good Benchmarking Actually Looks Like

Effective benchmarking for an auto repair shop compares you on the four metrics that most directly drive profitability:

  • ARO: Are you getting full value from each car that comes through your door?
  • Car count: Is your volume where it needs to be to support your revenue goals?
  • Parts margin: Are you protecting margin as supplier costs fluctuate?
  • Effective labor rate: Is your real revenue per labor hour aligned with your posted rate?

Each of these metrics has a different lever. If your ARO is lagging, the fix usually involves inspection completion rates or customer communication. If your car count is stagnant, the issue is typically acquisition or retention. If your parts margin is eroding, your pricing matrix needs a look. If your effective labor rate is low, it's often a discounting or packaging problem.

Benchmarking tells you which problem to solve first. That's valuable when you have limited time and you're trying to prioritize.

How the Tekmetric Shop Index Works

The Tekmetric Shop Index is a free benchmarking tool built from data collected across more than 12,000 auto repair shops. Enter your shop's metrics and get an instant comparison showing where you stand on each of the four key measures. No Tekmetric account is required. Anyone can use it.

The output isn't a vague grade — it shows you where each metric ranks and gives you a clear picture of where the gap is largest. That's the signal that tells you where to focus first.

➡ Benchmark your shop now →

What to Do After You See Your Rankings

The benchmarking data is the starting point, not the finish line. Once you know which metric is your biggest gap, you can start asking the right questions:

  • If ARO is lagging: How consistently are your technicians completing and sending digital vehicle inspections (DVIs)? Are customers seeing and approving the recommended work?
  • If car count is flat: Are you actively pursuing new customers? Are return visit intervals optimized? Are declined jobs being followed up?
  • If parts margin is soft: When did you last review your parts pricing matrix? Is it adjusting for recent cost increases from your vendors?
  • If the effective labor rate is low: Are service writers building jobs accurately? Are discounts being applied consistently or inconsistently?

Each of these questions points toward a workflow, and Tekmetric's reporting is built to surface the answers at the job, technician, and service writer level. But even before you get to that step, knowing which question to ask is most of the work.

➡ Benchmark your shop now →

The Shops Getting This Right

High-performing shops don't treat benchmarking as a one-time exercise. They check their rankings periodically, track how their numbers shift against the industry baseline, and use the comparison to coach their teams with context.

"You're at 85% DVI completion" is a data point. "You're at 85% completion, and top shops are at 95%" is a coaching conversation with direction.

"Seeing them take the shift to Tekmetric and then grow profitability in the same four walls has been phenomenal. Some of them are just exponential."  — Matt Schwab, Clutch Automotive, Tekmetric Customer

Takeaways

  • Internal tracking shows you direction; benchmarking shows you position.
  • The four metrics — ARO, car count, parts margin, effective labor rate — are the right comparison points.
  • Good benchmarking data is consistent, anonymized, and drawn from shops with similar operating profiles.
  • The TSI tool is free, built from more than 12,000 shops, and gives you an instant read on where your gaps are largest.
  • Your benchmark result tells you which lever to pull first — and that's where the work starts.

Once you know your gaps, the next step is building a system to close them.

➡ Benchmark your shop now →